+7 495 989 9610, 9am6pm (GMT+3), Monday – Friday
ИД «Финансы и кредит»






Economic Analysis: Theory and Practice

The Free Money Index

Vol. 19, Iss. 8, AUGUST 2020

Received: 21 May 2020

Received in revised form: 10 June 2020

Accepted: 23 June 2020

Available online: 28 August 2020


JEL Classification: A13, D12, E21, I31, O15

Pages: 1512–1530


Mal'tsev K.V. Regional Analytics & Information, Nizhny Novgorod, Russian Federation

ORCID id: not available

Ershov D.E. Raspberry RU, Nizhny Novgorod, Russian Federation

ORCID id: not available

Subject. The development of modern information technologies determines the emergence of new opportunities for obtaining empirical data on household consumption. This allows the formation of new, alternative indicators characterizing various aspects of the standard of living. The article describes one of these indicators, i.e. the free money index.
Objectives. The purpose is to show the possibilities of the free money index in the analysis of living standards of the population.
Methods. The empirical basis of the study is the data of the Federal State Statistics Service and Romir Consumer Scan Panel.
Results. We calculated the free money index for households in Russia from 2008 to 2019. In general, the index has an upward trend, except 2009 and 2015. It includes cities with different population and takes into account the level of inflation, physical volume of purchases by four selected products, and seasonal fluctuations.
Conclusions. The free money index, differing from the purchasing power, the wealth index and other indicators, characterizes the structure and changes in household consumption, and objectively reflects the well-being of the population. The free money index computation is necessary for the current analysis of economic and social policy measures. In more general terms, it can also be used to study the household behavior in micro- and macroeconomic aspects, the public welfare, and the impact of income distribution on economic development.

Keywords: quality of life, free money index, panel study, household consumption pattern


  1. Kislitsyna O.A. [Approaches to measure the progress and quality of life (well-being)]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2016, no. 10, pp. 28–38. URL: Link (In Russ.)
  2. Sinitsyna V.V. [A model of socially oriented development of the Russian Federation based on a comparative analysis of traditional models of the social welfare State]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2020, vol. 19, iss. 2, pp. 310–324. (In Russ.) URL: Link
  3. Malkina M.Yu., Khramova I.Yu. [Determinants of household saving behavior in Russia: An econometric analysis]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2019, vol. 18, iss. 4, pp. 604–621. (In Russ.) URL: Link
  4. Aivazyan S.A., Afanas'ev M.Yu., Kudrov A.V. [Integral indicator of quality for life conditions]. Tsifrovaya ekonomika = Digital Economy, 2019, no. 1, pp. 43–56. URL: Link (In Russ.)
  5. Zhmachinskii V.I., Cherneva R.I. [Labor productivity, remuneration and living standards: Problems and prospects for improvement]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2019, vol. 18, iss. 1, pp. 40–53. (In Russ.) URL: Link
  6. Aivazian S.A. Quality of Life and Living Standards Analysis: An Econometric Approach. Berlin, Walter de Gruyter GmbH, 2016, 399 p.
  7. Cheremisina N.V., Veis E.V. [Statistical methods in the analysis of living standards in the Tambov Oblast]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2019, vol. 18, iss. 3, pp. 538–549. (In Russ.) URL: Link
  8. Milekhin A.V., Ivanov O.V. Indeksy global'nogo mira [Indices of the global world]. Moscow, St. Petersburg, Nestor-Istoriya Publ., 2019, 376 p.
  9. Zubarevich N.V., Safronov S.G. [People and money: Incomes, Consumption and financial Behavior of the Population of the Russian Regions in 2000–2017]. Izvestiya Rossiiskoi Akademii Nauk. Seriya Geograficheskaya, 2019, no. 5, pp. 3–17. (In Russ.) URL: Link
  10. Bobkov V.N., Dolgushkin N.K., Odintsova E.V. [Universal Basic Income: Reflections on the Possible Impact on Improving the Living Standards and Quality of Life and the Sustainability of Society]. Uroven' zhizni naseleniya regionov Rossii = Level of Life of the Population of Regions of Russia, 2019, no. 3, pp. 8–24. (In Russ.) URL: Link
  11. Pigou A.C. The Economics of Welfare (4th ed.). London, Macmillan, 1932. URL: Link
  12. Michalos A.C. Connecting the Quality of Life Theory to Health, Well-Being and Education. Springer International Publishing, 2014, 402 p.
  13. Thaler R.H. Misbehaving: The Making of Behavioral Economics. New York, W.W. Norton & Company, 2016, 432 p.
  14. Caucutt E.M., Lochner L. Early and Late Human Capital Investments, Borrowing Constraints, and the Family. Journal of Political Economy, 2020, vol. 128, no. 3, pp. 1065–1147. URL: Link
  15. Krueger D. An Introduction to Macroeconomics with Household Heterogeneity. URL: Link.pdf
  16. Ryo Okui, Takahide Yanagi. Panel Data Analysis with Heterogeneous Dynamics. Journal of Econometrics, 2019, vol. 212, no. 2, pp. 451–475. URL: Link
  17. Wenke M., Rupsch H., Alekseeva T.S. et al. Social Responsibility of Companies in Russia and Germany. Ulyanovsk, UlSU Publ., 2019, 150 p.
  18. Kartaev F.S., Klachkova O.A., Luk'yanova A.S. [How does inflation influence income inequality in Russia?]. Voprosy Ekonomiki, 2020, no. 4, pp. 54–66. (In Russ.) URL: Link
  19. Drobyshevskii S.M., Makeeva N.V., Sinel'nikova-Muryleva E.V., Trunin P.V. [Estimation of welfare costs of inflation: The case of Russia]. Voprosy Ekonomiki, 2019, no. 9, pp. 55–69. (In Russ.) URL: Link
  20. Gillman M. The Welfare Cost of Inflation with Banking Time. The B.E. Journal of Macroeconomics, 2018, vol. 20, iss. 1. URL: Link

View all articles of issue


ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

Journal current issue

Vol. 20, Iss. 9
September 2021